Resource dynamics and economic expansion: Unveiling the asymmetric effects of natural resources and FDI on economic growth with a lens on energy efficiency

Abstract

Sustainable development recognizes the crucial role of a sustainable environment as a foundational component. Addressing climate change is acknowledged as a global challenge that requires a collective approach to effectively combat this issue. While developed economies often experience a higher prevalence of this problem, it remains essential to develop a strategy that goes beyond national borders in managing natural resources and their influence on sustainable economic progress. Hence, this research inspects the linkage of natural resources, FDI, and economic growth in the USA from 1990 to 2022. The study also included energy efficiency as a control variable. Pertinent time series procedures such as DF-GLS and Phillips-Perron tests of unit root specification while Johansen cointegration test for equilibrium and Bootstrap quantile regression for primary estimates have been utilized in the research. The research also included robustness check analysis through FMOLS, DOLS, and CCR as parametric procedures, while simple quantile regression as a non-parametric robustness method. The outcomes reveal that data of the variables are static at differences in both methods and long-run equilibriums in the variables. The empirical outcomes suggest that natural resources are asymmetric with economic expansion in the USA. Natural gas rents positively impact economic expansion, leading to resource blessings, while mineral resources have a resource curse in the economy. Moreover, energy efficiency and FDI stimulate economic growth across all quantiles. The robustness check protocols follow the same trajectory and found that outcomes are robust, valid, and reliable in both linear and non-linear methods. It is recommended that NRR be expanded and channelized into the real sectors of the economy, along with the encouraging role of foreign inflows and investments in energy efficiency to attain sustainable development in the USA.